British American Tobacco - Human rights and Modern Slavery Act

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Human rights and Modern Slavery Act

We must always conduct our operations in ways that respect the human rights of our employees, the people we work with and the communities in which we operate.

We have had a long-standing commitment to respect fundamental human rights, as affirmed by the Universal Declaration of Human Rights.

Given that we have operations located in some challenging environments and an agricultural supply chain, human rights is particularly important for our business and one we’ve long been focused on addressing.

Our Modern Slavery Act statement

We are aware of slavery in the world today and take a zero tolerance approach to it in all forms. This encompasses slavery, servitude, forced and compulsory labour and human trafficking, which affects some of the world’s most vulnerable individuals and groups, often through exploitation by criminal gangs.

Our first statement in accordance with the requirements of the UK Modern Slavery Act 2015, covering BAT plc and subsidiary Group companies, details the steps taken by the BAT Group between 1 January and 31 December 2016 to prevent slavery and human trafficking occurring within our business and supply chain1.

Due Diligence: the steps we take to identify, prevent, mitigate and account for addressing human rights business impacts

Remedy: the steps we take to remediate any adverse human rights impacts identified.

Our policies

Our Statement of Business Principles sets out our beliefs and values as an organisation. It includes our long-standing commitment to respect fundamental human rights, as affirmed by the Universal Declaration on Human Rights.

Our Human Rights Policy forms part of our Standards of Business Conduct (SoBC) and details our commitments for our most salient human rights issues, including no child labour or exploitation of labour, and respect for freedom of association, as well as covering our management of human rights risks.

Our Supplier Code of Conduct sets out the minimum standards we expect all our suppliers to adhere to, including specific human rights criteria, and is incorporated into our contractual arrangements with them.

Due diligence

Our due diligence processes enable us to monitor the effectiveness of, and compliance to, our Policy commitments, as well as to identify, prevent and mitigate human rights risks and impacts.

Tobacco leaf agricultural supply chain

With the highest risks for human rights abuses in our tobacco leaf supply chain, due diligence is conducted on 100% of our first-tier suppliers through the industry-wide Sustainable Tobacco Programme.

Non-agricultural supply chain

In 2016, we worked to build upon and strengthen our existing supplier assessment programme for strategic direct materials suppliers, to be better aligned to the UN Guiding Principles and extending it to cover all of our 70,000+ non-agricultural first-tier suppliers worldwide.

This included working with experts from Verisk Maplecroft, a respected independent consultancy, to develop a systematic, integrated supply chain due diligence (SCDD) process. The starting point for SCDD is to assess each supplier’s inherent human rights risk based on the type of supplier and the country where it operates. To do this, we use a series of Verisk Maplecroft’s human rights indices, including the Modern Slavery Index.

We then prioritise those suppliers identified as being exposed to the highest risks and ask them to complete a self-assessment questionnaire. The latter is structured around the key areas of our Supplier Code of Conduct and provides us with information on the policies, procedures and practices the supplier has in place to effectively manage these risks.

Where the results of the self-assessment highlight minor areas for improvement, we work with the supplier to develop corrective actions and agree a timescale for material progress towards compliance.

Where the results reveal more significant issues, an on-site audit will be conducted by our independent auditor, Intertek. This includes criteria covering forced labour, child labour, wages and hours, health and safety, environment and management systems.

Should the audit identify areas of concern, we agree an action plan with the supplier that includes clear timescales for improvements to be made. In the event of serious and/or persistent non-compliance, or where suppliers fail to demonstrate a willingness to improve performance, we reserve the right to terminate the business relationship.

Having successfully tested the process in 2016, we are now conducting a phased roll-out to all our non-agricultural suppliers worldwide.

In addition to audits triggered by the SCDD process, all of our strategic direct materials suppliers, as part of our existing supplier assessment programme, have to undergo the same audit, also
conducted by Intertek, in order to be appointed as a new supplier to BAT. They are then re-audited every three to four years.

BAT subsidiary companies

All BAT subsidiaries are reviewed annually against country-level human rights risk indicators for businesses by Verisk Maplecroft , an independent global risk analytics consultancy. This includes Maplecroft’s key human rights risk indices, covering issues relating to the labour rights, such as freedom of association, child labour and modern slavery; issues relating to safety and security, such as occupational health and safety, levels of criminality, conflict severity, terrorism intensity, and abuse of human rights by security forces; and issues relating to equal opportunities and fair treatment, such as discrimination in the workplace and the rights of vulnerable minority groups.

The highest risk countries are then reviewed by our Board Audit Committee, and the performance of our companies in managing human rights in those countries is monitored by our Regional Audit and CSR committees.

It is also a specific requirement of our key business controls, which apply to all Group companies, for human rights risk assessments and risk mitigation action plans to be in place in countries of concern and for processes to be in place to demonstrate that human rights are managed effectively in the workplace and supply chain. All BAT business units are required to report compliance against the controls annually.

Remedy

Anyone working for, or with the BAT Group, can raise any concerns or grievances in confidence and without fear of reprisal through:

Engagement and consultation with stakeholders directly affected by our operations supplier or farmer groups/associations and, when appropriate, local communities.

To strengthen and increase the accessibility of our grievance mechanisms, we plan to implement a new third-party managed 'Speak Up' hotline and website by end 2017.

We conduct detailed investigations of all reported incidents and, in the event of any adverse human rights impacts being identified, we take steps to remediate them, including working collaboratively with the relevant stakeholder where appropriate. Examples include:

Supplier corrective action plans

We use the results of supplier self-assessments and audits to work collaboratively with suppliers to agree an action plan with the supplier that includes clear timescales for improvements to be made. In the event of any serious and/or persistent issues, or where suppliers fail to demonstrate a willingness to improve performance, we reserve the right to terminate the business relationship.

Breaches of our Standards

For any cases established to be breaches of our Standards, the appropriate action will vary from case to case but will include, depending on the circumstances, dismissal or disciplinary action and, where appropriate, reporting the case to the relevant authorities. Where any weakness in internal controls is identified, appropriate measures are taken to strengthen them.

Community projects and multi-stakeholder partnerships

Some human rights issues, particularly in our agricultural supply chain such as child labour, have more endemic root causes which one company – or even one sector – cannot tackle alone. So implementing long-term community based projects and multi-stakeholder partnerships is central to our approach.

1. Copies of our Modern Slavery Act statement approved by the Board and signed by a Director of each of the relevant BAT subsidiary companies (listed in footnote 3 on page 1 of the statement) are available on request by contacting Noëlle Colfer in our Company Secretariat department at:
Globe House, 4 Temple Place, London WC2R 2PG United Kingdom
Tel: +44 (0) 20 7845 1000